What do you think about creating video testimonials like these for your clients as a commercial real estate agent? In today’s world it’s more than just about the “real estate transaction” – its about accelerating everyone’s success!
Filed Under Ask The Expert, Featured Office Space, Market Info, Real Estate Marketing · Tagged: commercial office space, Commercial Real Estate Toronto, firefox, head office, mozilla Canada, office rent toronto, office rentals toronto, office search toronto, office space in toronto, Office Space Toronto, Pre-Construction - Mozilla's new Toronto Head Office - 366 Adelaide St W, toronto, Toronto Office Space, toronto offices for lease
We recently finished a deal with Mozilla Canada to lease their new head office space in Toronto. Check out some pre-construction pictures. This place is going to be SWEET!
Want to lease space in the building? Call us at 416-643-3713 or E-mail Us Here
Filed Under Featured Office Space, Market Info, Marketing Tools, Real Estate Marketing · Tagged: commercial real estate, cool commercial real estate, cool toronto company, LinkedIn, toronto, Volunteer Your Office Space and Advertise for free on OfficeSearchToronto.com
Do you have a cool office space or work for a cool company you want to show off? I’m looking for groups that want to show off their office space like Microsoft did here… only much shorter. Don’t be shy!
Filed Under Agent Tools, Landlord Tools, real estate gadgets, Real Estate Marketing, Tenant Tools · Tagged: Commercial Real Estate Video Marketing, LinkedIn, real eestate marketing, real estate video, toronto
Combine video walkthrough and 3d renderings for that great 1 – 2 punch.
Filed Under Ask The Expert, Business and Life, Market Info · Tagged: commercial real estate market information toronto, commercial real estate news toronto, HST, LinkedIn, office space news toronto, Ontario, Ontario Update: Preparing for the Harmonized Sales Tax, PST, real estate market information, toronto, toronto commercial real estate news, toronto office market, toronto office space news
In March 2009, the Ontario government announced that it would be harmonizing its PST with the federal GST in order to create a single consumption tax of 13% effective July 1, 2010 (“Harmonized Sales Tax” or “HST”). Other provinces have previously implemented a similar regime or are about to follow suit. The change brings with it the need for both landlords and tenants to understand and plan. From a leasing perspective, that includes ensuring that their leases adequately address the new system.
Currently, separate consumption-based taxes are collected by the Canadian (federal) and Ontario (provincial) governments. At the federal level, a Goods and Services Tax (“GST”) is charged at the rate of 5%. GST applies to most transactions generally seen within the commercial leasing context, including the payment of rent. Except for GST-exempt businesses, GST paid out is credited against GST collected from customers, as an Input Tax Credit (“ITC”). (A GSTexempt business provides goods and services that are exempt from GST, so they collect none. Similarly, they make no claim for ITCs. Health care services (including dental services) are GST-exempt, as are educational services, child and personal care services (such as day care), legal aid services, and supplies provided by charities, public bodies and financial services providers (such as banks).) For an average business (i.e. not one that is GST-exempt), the ITC amounts add up to more than the GST payments on purchases of goods and services, and the result is that the GST is neutral except as it relates to cash flow.
At the provincial level, an 8% Provincial Sales Tax (“PST”) is applied to some goods and services. Unlike the GST, there is a plethora of PST-exempt goods and services, including rent payments. Exemptions may be available to businesses depending on the type of purchaser involved, the type of goods purchased and the use to which the item is to be put.
Although both taxes are consumption based, one (the GST) is largely considered as less painful than the other (PST) because the latter is a true cost of doing business, albeit applied to a smaller basket of items.
Most lease forms express an obligation on the part of the tenant, and in some cases on the part of the landlord, to pay GST on rent and other charges. In the absence of a clear contractual obligation, legislation requires that it be collected on taxable supplies (e.g. rent), so there is little likelihood that a party will avoid paying it and face no sanctions. However, from a remedies standpoint, it is always better to point to a clear contractual provision expressing an obligation to pay. Some lease forms allow landlords to recover from their tenants the cost of GST paid or payable on costs included in “operating costs”. Some lease forms require that these amounts be offset by any claimable ITCs. By and large, since GST was first implemented in 1991, there has not been a lot of deep thought given to whether lease forms adequately treat the subject of GST, since the taxation system has taken hold of Canadian business consciousness and is widely understood, applied and accepted as “ordinary”.
The introduction of the HST involves blending GST and PST into a single tax to be administered by the Canadian (federal) government. As a result of amalgamating the two taxes, some goods and services previously exempt from PST will become subject to 13% HST. Generally, we can expect that more goods and services will be taxed; this new revenue is exactly why the Ontario government is making the change.
The changes being implemented to the consumption tax system in Ontario will generally not significantly increase the operating costs of businesses who are eligible for ITCs. On the contrary, the amalgamation will likely result in a net savings for those businesses because previously PST was not subject to any ITC but was merely an out-of-pocket cost.
Unfortunately, businesses currently exempt from GST will see an increase in their operating expenses as they will be required to pay the increased HST on their rent and other expenses but will still not be eligible to claim any ITCs.
In addition, certain restrictions will apply respecting the ability of businesses with annual taxable sales above $10 million (“large businesses”) to claim an ITC on certain transactions. In particular, for the first 5 years following the implementation of the HST, large businesses will not be able to claim ITC’s on the 8% PST paid on the following: energy; telecommunications services (excluding internet services and toll-free numbers); vehicles with a weight below 3000 kilograms (and their associated fuel); and food, beverages and entertainment. The ITCs for these items are to be phased in over the three years following implementation of the HST. For the period July 1, 2010 to June 30, 2015, this change will effectively increase, by 8%, the cost of utilities (excluding water) for commercial property owners and managers who qualify as large businesses. (NB: There is some ambiguity with regard to whether the restriction will apply to utility bills in their entirety, and whether the definition of ‘large business’ will apply to a building owner or the property manager.)
What to do to get ready for HST
Attention should be paid to ensuring that offers to lease, letters of intent, and leases that will be in effect as of July 1, 2010 properly address HST. Many standard form leases provide that the tenant will be responsible to pay GST, but refer only to GST and therefore may not be written broadly enough to capture the combined tax. While some lease forms already include broad definitions of “Sales Taxes”, it is prudent to evaluate all standard form leases, letters of intent, offers to lease and other agreements and remove any references to GST or narrow definitions of sales tax in favour of capturing a broader range of possible consumption-based taxes. These broader terms should include the concept of “any harmonized sales or other consumption tax now or in the future imposed by any level of governmental authority, whether against rent or any other amounts”.
Likewise, “operating costs” should be defined to include HST in respect of which no ITC is available.
An irritant in the area of consumption based taxes has arisen over the years around the issue of whether a landlord must pay GST on a leasehold improvement or other allowance paid to the tenant as consideration for the lease. Some landlords routinely agree to pay while others agree to pay only if the taxing authority requires GST to be paid. The transition to HST should not cause any change in thinking, except that if the HST is not required to be paid by the taxing authority, perhaps it is fair to routinely qualify that obligation. An unnecessary 13% outlay is worth avoiding, even if it does count as an ITC.
Several provinces have already graduated to the HST level; they are comfortable with that regime and report no major administrative difficulties for business. Hopefully Ontario will enjoy a similar experience.
c/o Daoust Vukovich LLP
HST Info – Newsletter
Filed Under Available Office Space Toronto, Brokers Letters, Downtown West, Office Space Deals · Tagged: commercial real estate market information toronto, commercial real estate news toronto, LinkedIn, New Listing - 860 Richmond Street W, office space news toronto, real estate market information, toronto, toronto commercial real estate news, toronto office market, toronto office space news
860 Richmond Street West
4,251 sf – over 2 years left on the term
$17 net + $6.85 TMI
Brick and Beam office space with perimeter offices, kitchenette, boardroom and open space.
Filed Under Business and Life, Market Info, News · Tagged: central, climate, clinton, don, donlands, iniative, lakefront, LinkedIn, lower, More…harbour, neighbourhood, quay, queen's, river, toronto, Toronto Central Waterfront Update, waterfront
Great update from Adriaan Geuze and his vision of the new Toronto waterfront. His plan could transform the shoreline of Toronto into one of the most beautiful waterfronts in the world. http://waterfronttoronto.ca.
Filed Under Market Info · Tagged: april 2009, available space, commercial, commercial office leasing, commercial office space, commercial real estate, commercial real estate information, commercial space, downtown toronto, March 2009, News, real estate news, sublease space, toronto, vacancy rate
Too Much Doom and Gloom about Downtown Toronto? – smithcompany.ca – At the peak of the meltdown in the commercial office leasing markets in Canada in the 1990′s, the overall vacancy rate in Downtown Toronto was a staggering 18%. How bad do things have to get in order to reach the level over the next 4 to 5 years? Currently there are 5.4 million sf of available space in the existing inventory in Downtown Toronto, with an available rate of 8.3%. An additional 4.8 million sf of space is currently under construction, with 1.5 million sf, or that space currently available for lease.
Smith Company News Release, Mar 02, 2009
U.S. Business Owners Buy Commercial Real Estate – With interest rates now at historically low levels and the United States many business owners have been considering the purchase of commercial real estate for their business locations. The benefits and drawbacks to commercial real estate ownership vary from business owner to business owner but potential buyers should educate themselves about the obvious and sometimes hidden benefits to the ownership of a commercial property. Below are some of the major benefits to ownership as opposed to leasing a commercial space.
BiggerPockets.com, Mar 03, 2009
Sublease space climbs in Toronto, Vancouver and Calgary – If the sublease market is the canary in the coal mine for gauging the health of commercial office space, then in Vancouver and Calgary, the bird is flopping around on the bottom of the cage and, in Toronto, it has started to breathe hard. In Vancouver in the fourth quarter alone, sublease space available in the central core leaped to 417,000 square feet from 176,000.
Globe and Mail, Mar 10, 2009
Allied Properties REIT Year-End Results for 2008 – alliedpropertiesreit.com – AP.UN-T – Allied Properties REIT today announced results for the fourth quarter and year ended December 31, 2008. Allied completed $152 million in acquisitions in 2008, bringing its portfolio to 81 predominantly Class I office properties with 5.6 million square feet of leasable area. As in prior years, Allied’s portfolio expansion was part of a focused consolidation strategy.
SOA World Magazine, Mar 10, 2009
Lunch with Dr. Sherry Cooper: Global Economic Update 2009 – torontocrew.org – Toronto Commercial Real Estate Women is pleased to welcome back Dr. Sherry Cooper, Executive Vice President, Global Economic Strategist, BMO Financial Group and Chief Economist, BMO Capital Markets. Over lunch, Dr. Cooper will simplify the complex global economic trends affecting commercial real estate today. The event is scheduled for Thursday, April 2, 2009. Download the Event Notice linked below for more information and to register.
Event info and registration form, Mar 12, 2009
Seeking tenants in a recession for new Toronto tower – brookfieldproperties.com – BPO-T – When the Bay Adelaide Centre is completed this summer, it will be the first major skyscraper to join Toronto’s financial district in more than a decade. But it will also be seeking tenants in the midst of a severe economic downturn. The 1.1 million square foot tower, the first of three planned by Brookfield Properties, will enter a market slowed by a credit crunch.
Toronto Star, Mar 20, 2009
Colliers 2009 industrial forecast for key Canadian markets – colliers.com – Industrial markets in Canada have performed well during recent years, with stable vacancy rates and an average annual rental rate growth of 7 percent over the past five years. Speculative building is a small component of new supply and this has maintained an environment of tight availablity, with national vacancy rates fluctuating within a tight band of 4 to 5 percent during the past 5 years. Tight credit conditions and lenders? aversion to risk will also act to promote sustained low vacancy rates.
Colliers International Report, Mar 30, 2009
Signs of life in real estate – On a day when private real estate investors faced a serious case of sticker shock, publicly traded REITs showed they continue to enjoy investor support. Two private equity funds bought the John Hancock Tower in a deal that valued the 60-storey building at $661-million (U.S.), or 49-per-cent less that the $1.3-billion that the fund selling the building paid for it in December, 2006.
Globe and Mail, Apr 01, 2009
I am on a file with a co-worker and he sent the following email to a client… which I agree with.
We continue to see quite a few sublets come to the market, a lot of which are built out. One thing you may want to consider is taking advantage of a sublease at discounted rents. The reason I mention that is that vacancy is still low and the majority of landlords are not bending on their rental rates. TD Centre will will be more negotiable, come next year, but only for larger size tenancies of 10,000 -15,000 and greater. My advice is, if you are month to month, to let us know what you are looking for so we can keep our eyes out for something that could be a match. If you are in the same size range as before and want to save some money, your best solution will be to find a sublease that is already built out today versus on a direct basis in 2010.
I agree with him. The time to capitalize on a quality sublease is today… or maybe this summer.
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Filed Under Business and Life, Market Info · Tagged: commercial real estate market information toronto, commercial real estate news toronto, downsizing, lease audit, LinkedIn, office space, office space news toronto, real estate market information, toronto, toronto commercial real estate news, toronto office market, toronto office space news
Particularly coming into the summer (I think we are going to bottom out in July / August but we will see), its a great opportunity to do an early renewal (blend and extend) or lease restructure. Whether its downsizing your premises or extending your term to capitalize on the lower rental rates offered right now by your current landlord, a lease restructure is a great way to save some money.
Colliers also has a lease audit and tax department. Both services are paid on a percentage savings basis. Usually its only worth it if you occupy over 5,000 square feet but its a great opportunity to keep your landlord honest, and its free as we are paid on a “cost savings” basis!
Another solution is marketing your space as “shared” offices. If you have extra space or offices, there is significant activity in the start-up market. People that have recently been let go from larger organizations are using this market to start the new company they have always dreamed of. You can capitalize on this by offering convenient short term solutions! Shared offices are going for between $1000 and $1500 per month depending on how nice the space is and location, location, location!
For more cost saving ideas call 416-992-9869 or E-mail Me and don’t forget to add me to your favorite tracker below!